Look at remaining life expectancy

The DBS survey cited in the report ("Saving too little, too late for retirement"; last Thursday) points to a shortfall in the retirement savings of "emerging affluent" Singaporeans, who are expected to run out of funds in their later years.

The survey noted that the average life expectancy of Singapore residents born in the 1980s is 70 to 75 years, which would mean that those retiring in their early 60s would have just about enough to cover their financial needs in retirement - in theory.

A key concept, however, is remaining life expectancy.

A 65-year-old man in 2013 can expect to live another 18.8 years; a woman, another 22 years, according to the Department of Statistics. It would be better for financial planning purposes if we calculate our retirement adequacy needs based on our remaining life expectancy at the point of retirement.

For those approaching 65 years of age in the near future, that may mean at least another 19 to 22 years of life post-retirement. Those who are younger can expect an even longer period.

Christopher Gee

This article was first published on July 09, 2014. Get a copy of The Straits Times or go to straitstimes.com for more stories.